Christopher Urges Arabs to End Boycott of Israel : Mideast: At regional conference, secretary of state adds that prosperity hinges on Syrian, Lebanese peace moves.

AMMAN, Jordan — Declaring the Middle East not only open for business but already “doing business,” U.S. Secretary of State Warren Christopher on Sunday urged Arab countries to officially abolish their four-decade economic boycott of Israel.

Christopher also told nearly 2,000 executives and political leaders gathered here for a three-day economic summit that Middle East peace must include Syria and Lebanon if the region hopes to see major economic development.

“The boycott against Israel maintains walls at a time when negotiations are bringing them down. It impedes regional economic integration. The boycott serves no one,” Christopher said.

Nodding toward the Israeli and Arab business executives and representatives of multinational corporations seated in front of him at Amman’s Palace of Culture, Christopher added, “While the boycott is being dismantled and many of the countries here no longer observe it, the moment is right to end the boycott completely.”

Although several of its members now openly and semi-openly trade with Israel, the Arab League has refused to lift the boycott largely because of opposition from Syria.

Christopher is scheduled to stop in the Syrian capital, Damascus, today to meet with President Hafez Assad about resuming peace negotiations with Israel, but no major breakthrough is expected. Syria is demanding the return of all of the Golan Heights, which Israel captured in the 1967 Arab-Israeli War.

Syria supports the Hezbollah guerrillas fighting Israeli soldiers occupying southern Lebanon and also Palestinians who violently oppose the 1993 peace agreement between Israel and Palestinian leader Yasser Arafat. Damascus was the base of Fathi Shikaki, the leader of the militant Islamic Jihad movement who was gunned down in Malta last week. His followers blame the Mossad, the Israeli spy agency, for Shikaki’s death.

There was intense security Sunday at the Middle East/North Africa Economic Summit amid threats of revenge against the Israelis by Islamic Jihad, which has been responsible for several bus bombings in Israel since the 1993 accord.

Most of the business people were far too engrossed in dishing out their business cards, kissing cheeks and shaking hands, however, to be bothered by soldiers and security checks. Many of them went to Casablanca, Morocco, last year for the first regional economic summit, which served as a coming-out party for the Israeli business community and sought to draw international attention to the region’s economic needs and possibilities.

This year, many businesses are represented by executives of a higher level who have come to Amman seeking business partners. The mood has been upbeat among executives who have focused on joint ventures and new investment opportunities even as government officials have engaged in political tiffs.

Arafat made a pitch for the free movement of goods and Palestinian workers into and out of the Gaza Strip and the Israeli-occupied West Bank. He said the Israeli government has closed off the areas for 220 days in the past 14 months, despite peace agreements, and that the closures have been costly for Palestinians.

Arafat also railed against the U.S. Congress for its vote last week to move the American Embassy in Israel from Tel Aviv to Jerusalem. He called the decision “a very dangerous precedent [that] threatens to torpedo the peace process,” although he commended President Clinton for opposing the vote.

The Palestinians claim East Jerusalem as their capital.

Israeli Prime Minister Yitzhak Rabin noted that he had just arrived from Jerusalem--”the capital of Israel,” as he quickly threw in--after a mere 20-minute flight that was his first to Jordan in the 48 years since Israel’s founding.

“Historians will ask why it was necessary to wait so many years to travel such a short distance,” Rabin said.

Just how quickly the Middle East should continue to make peace--and make money--has become a point of contention between Egypt and Jordan, who are vying for a position of leadership in the so-called new Middle East. Egypt is nervous about an emerging economic alliance linking Israel, Jordan and the Palestinians and about the troika’s good relations with the Clinton Administration.

Egyptian Foreign Minister Amir Moussa criticized Jordan for moving with “unseemly haste” in the peace process with Israel and for failing to coordinate its efforts with Syria and the Palestinians.

Jordan’s King Hussein interrupted the program to respond that his country is only doing what Egypt did when it made peace alone with Israel.

“If moving toward peace is rushing, then Egypt rushed in 17 years before us,” the monarch said. “And if restoring our own rights and what we have missed over the years is rushing, we will not only rush but run swiftly toward achieving an honorable life for our people.”

Despite the sore words, Egypt won the bid to hold next year’s economic summit in Cairo--a lucrative opportunity to show off the country to potential investors.

Cairo also is to be the base of a new regional development bank backed by the United States. Christopher said the Bank for Economic Cooperation, proposed at the economic summit in Casablanca last year, will be formally announced at this year’s conference.

The Middle East is already served by the World Bank, the Arab Fund for Economic and Social Development, the European Investment Bank and other multilateral institutions--all of which pump about $3.5 billion a year into the region.